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The Big Shiftin CommunicationsThe Drive toward Cloud-Based Communications

A white paper by Dave Michels

The Big Shift in CommunicationsThe Drive toward Cloud-Based Communications

By Dave Michels

Business communications should be strategic to an organization’s competitiveness, but too often it is just a cost of doing business. No business has historically argued that its success was the result of proper selection of its phone system. That’s why it is time to rethink com-munications. Phone systems are out! The alternatives are varied, but generally offer broader and more empowering capabilities that promote collaboration among colleagues as well as enhanced interaction with customers, partners and suppliers.

What changed? In a word, everything. The entire model of how businesses buy and con-sume communications, the underlying technologies and fundamental business requirements are all radically changing. When it comes to communications, ‘business as usual’ no longer applies. These changes are not minor or incremental, but reflect a totally different approach to how business gets done.

In the past, the PBX was a proprietary solution for voice communications. Despite a multitude of choices in vendors, dealers and features, most PBX-type systems operated in essentially identical ways. Many organizations admit having selected their PBX based on the look and feel of the hand-sets. That was hardly the way to make a long-term capital purchase, but realistically, many business-es gave up because the myriad of options made communications overwhelming and confusing. As long as business got done, choosing a system felt like a fruitless exercise. It’s a good thing a better approach now exists.

This paper explains both UC and the attraction to the cloud or specifically UCaaS (Unified Communications as a Service). Hosted communications is the only communications sector experiencing recent, consistent, year-over-year growth. The model offers businesses opera-tional, financial and technical advantages. UCaaS offers a transformation in business com-munications and collaboration. There’s a lot of change taking place, and it is good news for business enterprises.

“When it comes to communications, ‘business as usual’ no longer applies.”

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The CloudThere is considerable confusion surrounding the cloud and a big part of that stems from the fact that the industry gravitates towards words with vague meanings. Today, “the cloud” is a catchall term that describes the changing landscape of information technol-ogy. “The cloud” describes how IT products have transitioned into IT services. Business enterprises have always subscribed to and purchased IT services, such as telephone circuits or server maintenance agreements – what’s new is how these services are now re-placing capital equipment. The cloud initially gained traction with IT infrastructure and has rapidly expanded into communications.

One of the initial platforms that migrated to the cloud was email. The lessons learned from email apply to many services – an exer-cise that busts myths regarding the necessity of on-premises equipment. For example, buying hosted services at retail is often less expensive than producing the services internally because service providers operate at a scale and sophistication that general businesses can’t match. Plus, hosted services come complete with full features, remote access, technical support and high availabil-ity packaged into a single monthly per-user price. It’s become clear that there is little value in prioritizing internal limited resources to create services that are not core to sales or customer retention.

Now that “the cloud” has caught on, numer-ous specialized service providers offer nearly every aspect of IT as a service. Popular exam-ples include Salesforce.com for CRM, Quick-books.com for accounting, and Yammer for social networking. The transition to hosted services is now about a decade old. Clearly, hosted services are not a fad or experiment. Rather, they are the new way to obtain mis-sion-critical IT services, and they are coming to a phone near you. Hosted services are attractive to businesses both operationally and technically. IDC recently forecast that IT hosted services will soon represent a $60 billion market that’s growing at 26 percent annually.1

Unified CommunicationsUnified communications (UC) is another one of those terms with wide, subjective inter-pretation. Each vendor and each service provider has a slightly nuanced take on the term. Broadly, UC represents the evolution of communications beyond voice to multiple modes and mediums. UC typically includes voice, presence, messaging and video as core services, with various other modalities often included.

Not coincidentally, during this transition, the predominant means of business communica-tions migrated from voice to computer net-works. The end user experience is similar but

better. Initially, Voice over Internet Protocol networks (VoIP) had issues with quality and reliability, but over time that flipped. Now VoIP offers better clarity and richer commu-nications. A big benefit of VoIP is that it’s less sensitive to distance. This means a single VoIP solution can support multiple locations, including home users and even mobile users. There’s no need to have a separate commu-nications solution for each location anymore. That’s a big deal because the workforce has never been so distributed. “Work” was a location; now it is just a verb. VoIP enables anytime and anywhere communications. UC solutions can be obtained in a variety of ways. The traditional model of an appliance or box (PBX model) is still common. It typical-ly requires an annual software maintenance

1 “Top 10 Predictions: IDC Predictions 2012: Competing for 2020,” December 2011, IDC#231720, Volume 1.

Photo: Polycom

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agreement that provides about two upgrades a year (which requires downtime). It is also common for “UC Apps” (messaging, mobility, conferencing, etc.) to run on separate ded-icated servers. The system further requires circuits, typically Session Initiation Protocol (SIP) trunks. Due to SIP’s interoperability limitations, businesses are advised to careful-ly match circuit providers to the equipment’s recommended guidelines. Businesses are also advised to purchase a Session Border Controller (SBC) to protect the SIP traffic from various Internet threats. Many vendors offer software-only UC options. This approach is similar to that of installing an appliance, but requires the customer to select, configure and manage appropriate, compliant hardware.

Another option is UCaaS, or Unified Com-munications as a Service. This is usually offered at an all-inclusive monthly price per user. UCaaS offers the benefits of UC with-out obligations. That is, there are no capital commitments and no need to complete the solution with multiple vendors. UCaaS makes the business enterprise a customer instead of its own internal supplier.

Changing Business RequirementsSmart business enterprises are no longer interested in phone systems – they can’t afford to be. Businesses require seamless multi-modal communications. Phone calls, or voice communications represent only one mode, but that’s not the way we work any-more. Now we communicate more via key-boards than dial-pads. The computer itself is a fantastic multi-modal communications de-vice capable of voice, IM (instant message), messaging (email, voicemail and fax) and video. On the go, our mobile devices can do it all just as easily. Of course, UCaaS also supports phones – the key here is to select one solution, and then use devices, modes and locations as needed.

UC is an easy problem to solve from a technology perspective. Numerous services – some of them even free – serve up slices of the UC pie. The speed of innovation has never been faster. The entire UC suite keeps evolving, as do the number and types of supported devices, operating systems and

networks (VoIP, VoLTE, VoWiFi – from a PC, Mac, smartphone, tablet, etc.). The challenge is creating a functional solution that ties it all together. It is simply too much for a general business to support, test and manage, partic-ularly as IT organizations are expected today to do more with less. UC solutions are only effective when they are intuitive.

MobilityNothing has had a bigger impact on business communications during the past decade than mobility. Business must respond to two broad challenges: accessing workers who are no longer tied to a desk, and managing a multitude of devices. Mobile and distributed workforces are now the norm, and tradition-al business hours have disappeared. This is driving more communications (voice, video, IM, etc.) to smart mobile devices. Yet, while encouraging accessibility, businesses must discourage staff from using their personal phone numbers with customer interactions due to turnover, security, employment law and other liabilities.

At the same time, the speed of business continues to increase, and the capabilities of new mobile devices are astounding. The iPhone has more computing power than the Apollo spacecraft did. If we can put a man on the moon, we can certainly take a business call while away from the desk. The iPhone, iPad, Android devices and other alternatives

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offer extraordinary value in terms of commu-nications and collaboration. On the flip side, wired VoIP telephones are (still) available for $600 that enable nothing more than voice at a desk – while smart mobile devices offer voice, IM/presence, messaging and video, without wires, for about the same price.

Just a few years ago, it was common practice for the business to provide mobile devices to employees. Today, employees consider their devices to be personal, and they prefer to use their own. BYOD, or Bring Your Own Device, is changing the decades-old practice of organizations providing employees the devices they need in their jobs. This change is based in a grassroots rebellion against out-of-date standard-issue devices. And it puts the employer in an interesting predicament.

On one hand, BYOD, temptingly, frees the employer from purchasing and managing devices. On the other, BYOD introduces challenges around standardization of tools. The native tools from Apple on iOS and from Google on Android are not particularly com-patible (FaceTime, Hangouts, etc.). The old standby of hardware standards can’t help in a BYOD environment. The solution is to lever-age the capabilities of these devices across platforms with powerful business applications to be used as tools of communication.

With the proper UCaaS provider, a busi-ness can realize the best of mobility and even BYOD. The trick is to completely hide employee direct dial mobile numbers. For incoming calls, call-forwarding techniques offer a simple answer. Outbound dialing and texting are more difficult, but some UCaaS providers now address this too. Beyond voice, most smart mobile devices also sup-port two-way video communications. This makes UCaaS with a strong commitment to multi-modal capabilities very compelling. In some situations, with highly mobile staff, organizations are completely eliminating desktop phones without losing enterprise PBX functionality.

CollaborationUC and collaboration are similar, but UC is generally considered as a set of technologies

(i.e., voice, presence, IM, messaging, etc.). In the cloud era the conversation is much less about technologies and much more about outcomes. Collaboration is the desired goal or outcome. Literally, collaboration means two or more people working toward a com-mon goal. The term wasn’t popular before because it was too obvious – it is what nat-urally occurred at the office during business hours. But collaboration is less of a given with a distributed and mobile workforce. New tools and processes are necessary to adapt to the current model.

In the office, we communicated via various methods: we used the phone, met in person, conversed over email, overheard conversa-tions, and of course caught up at the water cooler (or smoking room, break areas, etc.). Evidently, the water cooler did more than cool water, because collaboration dragged to a halt when we left the office. Few realized the value of all these mediums until they were eliminated via distributed workforces. With the initial rise in telecommuters came a drop in collective productivity. But tools now have emerged that enable collaboration over distributed teams and spaces. Employers must provide appropriate collaborative tools to stimulate multiple minds to work together.

Distributed teams need tools to make real-time communications engaging – this includes wideband audio, high-definition (HD) video, integrated calendars, screen-shar-ing technologies, unified messaging, etc. Obviously, these tools need to be portable – to show up whenever and wherever staff may be. Conferencing technologies become doubly important with distributed teams. To

“Tools now have emerged that enable collaboration over distributed teams and spaces.”

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share work and ideas, many organizations use services such as Google Docs (simultane-ous editing), Dropbox (device-independent shared content), networked calendaring (to communicate availability and appointments) and collaborative meetings (online confer-encing to mimic a meeting-room gathering). And tools are evolving to re-create informal in-office communications. For example, an open or closed door might indicate availabil-ity in the office, as does a presence icon in a distributed context.

Visual CommunicationsVideo communications are rapidly altering how we collaborate. For years, even cen-turies, the business world accepted and relied upon voice communications. How-ever, voice-only is fairly limited. We accept it as normal, but it isn’t. When television first emerged, some thought it would never threaten radio. But television offered a better,

richer experience. The TV show killed radio dramas, and even simple talking-head TV (such as news or comedy) beats radio.

Video conferencing is not new – it has been ‘on the verge of mainstream’ for decades. However, this time it is real. The reason is that the major barriers to video are all falling: cost, broadband networking and social norms. Not long ago, dedicated video conferencing end-

points cost thousands of dollars – but today, most laptops and mobile devices are fully equipped for video. The bandwidth required for video continues to drop, while total avail-able bandwidth continues to increase. For example, the simplicity of watching down-loaded movies over the Internet, impossible just a few years ago, is rapidly killing off local video stores.

In written communications, the rise of email messaging replaced some physical letters, but most email represents a net increase in communications. Physical letters are formal and take longer to compose, send and of course transport. Email communications are relatively quick and easy. For the same reasons, video will also increase communi-cations, beyond the fact that it presents an alternative to travel. Compared to travel, video communications are easier, faster and less formal than in-person visits. Compared

to audio/telephone or email, video communi-cations convey far more information including body language, expressions, environmental, various social cues, etc. Video increases the frequency and effectiveness of conversations.

Video conferencing cost continues to drop, but inadequate communications infrastruc-ture still keeps many businesses trapped in voice-centric communications. Some UCaaS

Photo: Polycom

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providers are bundling video services, some-times without additional charges. Video tech-nologies are improving with broader support and soft clients. A video-enabled business is now able to invite external participants such as customers, partners and suppliers into the conversation with a simple web link. For years, businesses have dismissed video as too expensive, but technology advances are eliminating that excuse.

Service Orientation“The Cloud” is too simple a term to ade-quately capture the shift that’s occurred. Subscribing, rather than creating, makes the business the customer instead of an in-house vendor. By subscribing to services, the responsibilities of repairing, maintaining, up-grading and managing disappear. The cloud may or may not be actually cheaper (in reality, it usually is), but stress and other hidden costs should also factor into ROI calculations.

As an added bonus, the monthly payments are recognized as an expense to the busi-ness – requiring no long-term accounting tricks, as with capitalized equipment. Ex-pense dollars come right off the pre-tax total. That’s the headline, but all those assumptions that underlie capital purchase calculations also disappear. Capitalizing assets requires a business to assume the lifespan of certain technologies, to assume its own future needs and to assume future economic conditions. These assumptions are unnecessary in a host-ed-service environment that typically doesn’t require long-term commitments.

CentralizationThe complexities of the onsite PBX were bad enough with just one location, but factor in additional offices and it becomes very com-plex, very quickly. Traditionally, each location required equipment and resources to man-age a minimum of three groups of vendors (dealers, manufacturers and circuit provid-ers). Businesses with multiple locations and third-party components such as voicemail or contact center solutions usually required full-time personnel to sort it all out.

UCaaS replaces and simplifies all that. With just one provider, a UCaaS solution can

service all locations, and most providers can support/supply local numbers for all regions. Increasingly, homes (and mobile devices) are now considered “office locations” as well. And with UCaaS, all sites, regardless of quantity and distance can now be seamless-ly connected. This is huge. Administration is conducted over a simple web interface instead of proprietary dealer-only solutions. Upgrades and maintenance are included – and everything is priced per user per month.

Even better, each location and each em-ployee receives the same solution. There are huge benefits associated with consistent technologies across an organization – train-ing, documentation, familiarity, consistent expectations. Not long ago, few multi-site or-ganizations could even send a company-wide voicemail; that’s easy today with UCaaS. Em-ployees can work wherever they are: home, office1, office2, coffee shop1, hotel2 and so on. Location can (and now should be) com-pletely invisible to customers and colleagues.

Conclusions and RecommendationsBusiness communications should be strategic to an organization’s competitiveness. That is more likely to be the case with UCaaS because it offers operational and financial benefits. However, the cloud won’t be for every compa-ny. For some, there are still compelling reasons to own equipment. Typically these situations are self-evident. Consider if the organization is in a position to self-deliver services more robustly, reliably, and cost-effectively than a

The Big Shift in Communications – SimpleSignal / September 2012 Page 8

specialized provider. The UCaaS adoption trend is pretty clear with year-over-year growth among the major service providers in an oth-erwise flat market. It resonates because it hits multiple pain points in one solution.

Customers don’t care about the underlying vendors and technologies that a business uses for communications. Nor do they care how many buttons are on a representative’s desk phone. They care about their conver-sations – reaching the right people to get business done. And if additional people are required, then it’s also important that col-leagues can reach each other. Solutions need to be designed for mobility and collaboration (not voicemail).

Attitudes are changing, and not just with customers. Employees also insist that tools enable flexibility and productivity. Working from home has swung so far into the socially acceptable realm that it has become a tool of retention. Employees and customers expect a rich menu of communications tools – in-cluding voice, video, messaging, conferenc-ing, and of course solutions for BYOD and mobility. The good news is that none of this is difficult or expensive via UCaaS. Organizations today are generally more streamlined after years of a struggling econ-omy. Across all major sectors, organizations have outsourced functions that don’t directly relate to competitiveness, such as janitorial, food services, printing, delivery, training and more. These moves made companies health-ier with improved customer focus. Switching to hosted communications is a continuation of this trend.

Getting started on the path toward UCaaS does not need to be complex. The following steps are recommended:

• At a minimum, consider implementing UCaaS to augment current infrastruc-ture. It could be used for remote em-ployees, teleworkers, or a branch office. This provides an opportunity to evaluate the provider and the benefits associated with UCaaS. Today’s hosted solutions are at feature parity with premises-based solutions and should be considered viable options.

• Evaluate providers for broad UC capa-bilities, not just voice. Go beyond the current features of the existing solution, and even though not all features may seem relevant today, assume require-ments will expand as users discover the versatility of UCaaS. Non-negotiables include rich features such as dynam-ic device selection, presence, video communications, and careful evaluation of new mobility capabilities includ-ing ring management, mobile clients, softphones, and teleworking options. All features should be accessible via an intuitive web portal – available to both administrators and users.

• When comparing prices be sure to include both hard and soft costs. Hard costs associated with traditional systems include: maintenance, software up-grades, dealer service fees, circuits, long distance usage, handset repair, and third party applications such as voicemail, call accounting, conferencing services, etc. Expect soft cost savings around training costs, reduced time form staff and management, reduced impacts from upgrades and outages, and the elimina-tion of required spare parts.

Today there are options – one requires capital, management and long-term commit-ments – the other doesn’t. Choose wisely.

Attitudes are changing, and not just with customers. Employees also insist that tools enable flexibility and productivity.

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About the AuthorDave Michels is a principal analyst at TalkingPointz, focused on business communications with extensive experience at all levels of the communications industry.

Dave created and writes the blog at TalkingPointz.com, which focuses on research and writ-ing about telecommunication market trends. The site has grown in readership steadily since its launch; with its irreverent, incisive take on the industry, TalkingPointz has become one of the most influential and often-quoted/linked blogs in the enterprise communications industry.

Dave has also become one of the most popular contributors to the enterprise communica-tions industry’s leading independent websites, including NoJitter.com and UCStrategies.com. He also contributes to the GigaOm Pro, TechTarget, CloudAve and Voice Report websites. Dave is the Community Manager of the IDG collaboration website CIOCollabora-tionNetwork run in conjunction with CIO Magazine.

Finally, Dave is a key participant in the enterprise communications industry’s leading confer-ence, Enterprise Connect. In addition to delivering presentations on major topics, Dave also oversees Enterprise Connect’s Innovation Showcase, which spotlights new and innovative vendor companies within the industry. In this role, he establishes selection criteria, convenes and guides a selection committee, screens applicant companies, and presents the winners at Enterprise Connect. Dave is also a frequent presenter at other industry events, and routinely attends and covers vendor conferences for analysts and consultants.

About SimpleSignalSimpleSignal is an enterprise hosted PBX and cloud-based Unified Communications service provider, delivering voice, video, and mobile communications to thousands of satisfied busi-ness users globally. SimpleSignal provides the most innovative and advanced mobile/video PBX capabilities in the industry, and is one of the first companies ever to extend video PBX telephony over iPads, iPhones, and Android mobile devices that can connect with any brand of video conferencing equipment.

Leveraging the disruptive technology of VoIP, SimpleSignal has radically changed the way business communicates with an astounding feature set that was impossible until now. Sim-pleSignal unified communications provides a true, one number solution that allows business-es to simplify and unify their business communications with voice, video and text commu-nications, web conferencing, mobile/desktop integration, call recording, voice and video conferencing, and a wide range of CRM and other application integrations.

SimpleSignal has gathered a highly experienced team of professionals in the telecom and SaaS market space. The company’s growing family of happy employees is spread across five states. SimpleSignal is the industry’s single most knowledgeable resource of emerging data, video and voice technologies delivered as a service.

For more information, visit us at: simplesignal.com, check out the company blog at simplesignal.com/blog, or connect at facebook.com/simplesignal and twitter.com/simplesignal.